Business Information System Analysis: Tesco's Competitive Edge

This report delves into Tesco's business information system (BIS), examining its crucial role in achieving and sustaining a competitive advantage. The report begins by discussing how Tesco leverages its BIS to enhance business processes, manage its supply chain, and improve customer service. It then evaluates various methods Tesco could employ to acquire software for a new BIS, considering both external sourcing options like SaaS and internal development approaches. Furthermore, the report describes the 6Cs framework (Cost reduction, Capability, Communication, Customer service, Control, and Competitive advantage) and how it applies to Tesco's operations. The report concludes by illustrating the diverse applications of information systems within Tesco, including e-commerce, the Clubcard program, and strategic decision-making. The report provides a comprehensive overview of the BIS and its impact on Tesco's business strategies.

BUSINESS
INFORMATION
SYSTEM

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
1. Discussing the extent to which business information system of Tesco help in achieving
competitive advantages................................................................................................................3
2. Evaluating the different methods that could be used by Tesco to acquire software for a new
business information system........................................................................................................4
3. Describing the 6cs framework.................................................................................................6
4. The varied uses of information system ...................................................................................7
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Business information system can be defined as boundary spanning field of study
associated with the manner in which information and communication techniques can be used to
enhance business processes and amend the value chain network of firm that is basically used to
obtain, produce and offer products and service around the globe. The sound information system
enable the company to collect, organize, store and communicate information both within and
outside the company. In this report, various aspect of business information system will be studied
in the context of Tesco (Beynon-Davies, 2013). It is a leading international grocery retailer,
founded in 1919 and headquartered in Hackney, London. The mission of company is to earn
their lifetime loyalty by identifying their different needs. In this report, knowledge and
understanding of the various uses of business information system in support of business activities
will be provided.
1. Discussing the extent to which business information system of Tesco help in achieving
competitive advantages.
Information system serve as major tool that is used by Tesco for sustaining in present
dynamic and competitive world. Business information system can be better defined as use of
better techniques and processes for managing, storing, distribution and overall processing of
information. It further plays a viable role in using such initiatives by supporting flow of
information and enhancing business intelligence (Yeh, Lee and Pai, 2012). The business
information system provides range of benefits to company such as reduction in cost leading to
better revenue margin. In addition to this aspect, it also help in improving the productivity of
business. With the help of information system Tesco can easily diversify its operations in
overseas market and assure growth and success. Also, it has been identified from the provided
case study that information system enable in streamlining of supply chain management system.
All these benefits further results into creation of competitive advantages for Tesco (Li, Hsieh,
and Rai, 2013).
Further, organization use wide range of competitive strategies to stay ahead of its rivals.
Some of them are, cost leadership, innovation and product differentiation. The cost leadership
strategy means a method to establish competitive benefit in market by ensuring lowest cost of
operations (Davenport, 2013). Tesco ensure it provide different product and services at low cost
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to ensure maximum sales and increased satisfaction among customers. In this respect,company
makes effective use of information technology. Such as, it use its e-commerce site tesco.com
which help in providing products to customers at their door steps. In this respect, company take
help of low cost warehouse where goods are stored and delivered directly to customers. This
further help in minimizing the extra cost that is incurred in hiring employee that pack the good
demanded by customer and transport same to customers (Österle, 2013). The other competitive
strategy that is used by Tesco is related with product and service innovation which is very much
essential to sustain in present competitive world. In this respect, Tesco has introduced new
techniques of Clubcard that help in ensuring loyalty among customers (About us, 2016). It is
innovative approach that enable customers to interact with company, by swiping the cars through
the EFTPOS terminals at checkout points help in getting customer details and transaction done
by it (Cegielski, Splettstoesser-Hogeter and Sanchez-Rodriguez, 2013).
The most important aspect is that by regular use of Club card, help customer in acuring
points from its use and redemption of same through voucher scheme discounting. Thereafter,
differentiation strategy enable company to develop a unique image of offerings of Tesco as
compare to its rivals. The entity use intense communication that facilitate customers to identify
the products of brand. Thereafter, to increase brand awareness company make effective use of
online advertising, search engine optimization, pay per click etc method (Power, Sharda and
Burstein, 2015). Other than this, entity is also planning to develop mobile applications through
which cellphone users can make direct purchase, payment and review product and services of
brand. Thereafter, upgraded and fine techniques can be used to ensure unique design of offerings
that meets the needs of customers in best manner. A innovative technique of green club card is
used through which entity appreciate customers promoting environment friendly shopping
experience such as reusing the shopping bags, recycling aluminium cans etc (Hu, Lin, Shi, and
Guo, 2015).
2. Evaluating the different methods that could be used by Tesco to acquire software for a new
business information system.
The information system in big entities like Tesco Plc should be employed across the
entity or regional in a small part of the company. From the provided case scenario, it has been
identified that company operates wide range of information system that enhance the overall
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effectiveness of business. The information system help in assuring functional control with the
help of single loop feedback and also control of strategical activities is done through double loop
feedback. For example, the products which are sold in the stores are marked at checkout points
which also modify new information regarding change in stock levels in the service region of
store. With the help of this information system company identifies need of refilling of products
in the store from the stock held in the warehouse area of the store (Reis, Esquivel and Singh,
2013). Therefore, in such manner entity ensure operational control. Other than this, loyalty card
is used by company to obtain information about buying pattern of customers etc. This also help
in ascertaining the products that can be sold easily at the stores at which duration of the year. It is
a fine example of strategic control by the management of Tesco. Further, with the help of
information system detail of how information can be rendered to management to facilitate
decision making and assuring control of the same. With the help of business information system,
wide range of inter-related variables can be used collectively to perform input,, processing,
output, storage and control actions so as to translate data into useful information which further
help business to make sound plan, take effective actions etc (Mörtlbauer, Sedelmaier and
Schroll-Decker, 2014).
In order to acquire new software for information system, the management of Tesco can
use external sourcing or depend upon the modifications and internal developments. Firstly, the
outside sources can be exploited to facilitate acquisition of new information system. The services
of specialized vendor can be used develop new software. The major duty of specialist in
information system is to alter and upgrade the applications for the Tesco requirement and
segregating the application to develop a coherent systems discipline for the business. Further,
company can outsource the data information system to other specialized business (Phillips,
Gorantla and Phillips, 2016). Therefore,services like telecommunication, development of
software and management of data centre can be overlooked by any expert firm in this field.
Other than this, offshoring can also be considered where Tesco can use services of global
company that operates as system developed for the purpose of managing information system.
The another external sourcing method that can be considered by Tesco is Saas. It can be refereed
as method that facilitate licensing and delivery of software. Therefore, software can be
authorized through subscription basis and is centrally hosted. Overall, it can be stated that Saas is
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effective software distribution framework where third party furnish host application and ensure
their accessibility to customers over internet (Christopher, 2016).
Further, in internal information system can be used by Tesco do develop new software
internally. It further encompasses use of two methods, life cycle development. As per this
method a systematic procedure can be used to develop software. As per this, there are six stages
of development of infrastructure, practicability study, analysis of system, designing of system,
programming and testing, installation and function and maintenance (Stadtler, 2015). These
stages are further explained as follows:
 Practicability study: This step help in knowing whether the system is needed as per the
extended term plans, strategical initiatives and cost-advantage assessment.
 Analysis of system: This step help in providing detailed description of queries regarding
development of software. The functions that will be performed by software, design of
system etc (Wisner, Tan and Leong, 2014).
 Designing of system: Here, a blueprint can be prepared to showcase the working of
software.
 Programming and testing: In the stage, the respective software modules can be
designed, tested and employed into a coherent functional system. To ensure continuous
control of quality there are various levels of testing that are used (Tayur, Ganeshan and
Magazine, 2012).
 Installation: Its is among the important step that enable ultimate testing of information
system in work surroundings and modifying of business functions to the new system and
assuring its segregation with other method already in place.
3. Describing the 6cs framework
 Cost reduction- It is the process used by companies to reduce the overall costs which in
return form a basis for increasing organizational profits. It is one the common method
used by an enterprise in order to cut their expenses and increases the sales and revenue.
For developing a balanced information system it play a significant role in identifying
company's strength to cover up their deficiency(Business information system, 2016).
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 Capability- Another important feature of any system is their internal abilities to perform
well even in tough business situations. It has been judged by evaluating the procedure by
auditing the system by carrying out manual testing (Yeh, Lee and Pai, 2012).
 Communication- The basic aim of every system is to communicate well to all its users
in order to complete the basic objective of that program. The communication skills of all
the workers should be accurate to communicate all the pros and cons of the existing
system to their final destination (Cegielski, Splettstoesser-Hogeter and Sanchez-
Rodriguez, 2013).
 Customer service- Another feature of this implementation process is catering the needs
of the customers. The basic pillar of every business is to handle the needs and
expectations of their customer. The effectiveness of the process is to be judged on the
basis of their ability to treat every customer as a boss and complete all their wishes as
their subordinates. The existence of every enterprise is dependent on the customers.
 Control- The control factors refers to the authority of the given process by defining
different channel of reporting. The current process can be divided into different
hierarchical and parrel authority to the higher authority. The current percentage of control
over grocery market is 30% which can be increases after applying this system (Hu, Lin,
Shi, and Guo, 2015). In the digitalised system where technology is leading peoples in
nthe business environment. In this kind of environment the company can automate all
their functioning to gain better results.
 Competitive advantage- Tesco Plc is a largest grocery market which provides wide
range of goods and services. Being world largest retailer it has several number of
competitors who are ready to pull down the company to gain advantage. The major threat
company is getting from outside is the substitute products which is provided at reduced
prices to attract the interest of different customers who are price sensitive (Österle,
2013). This system should focus on designing the existing products by changing their
labels, packing and grading to overcome the threat the company is facing currently.
4. The varied uses of information system
a) Describing the supply chain of Tesco
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As per the detailed study, it can be stated that the management of Tesco PLC is well
focused towards use of information technology tools so that work performance can be improved.
With an assistance of internet the business firm can offer services to customers in appropriate
manner. It also leads business to impressive level of success. It indicates that the information
technology use also enhances the opportunities for Tesco PLC. It has been noticed by Dekker,
Inderfurth and van Wassenhove, (2013) that by considering information technology, retail
company would be able to offer 24/7 services and better understand needs of customers as well
as suppliers. Better relationship with customers is also one of key benefit that business entity can
attain. Beynon-Davies, (2013) has asserted that the management of Tesco PLC is using diverse
communication tools in order to share information with customers. It creates better awareness
within market and increases the sales ratio. It is also considered as one of most effective
technique that allows customers to have effective understanding of product and services that are
offered by customers.
Mörtlbauer, Sedelmaier and Schroll-Decker, (2014) has also contended that the
management of Tesco PLC is also focused towards cloud computing and other technological
tools so that critical information with members can also be improved. Along with this, access of
significant information can also be from any where in world that enhances the productivity.
Customers can also registor complains in more ethical manner that allows management to
provide better response so that issues can be resolved. It clearly indicates that the work
management is also improved within organisation due to use of information technology.
Christopher, (2016) has stated that customers service, profit margin, online order entry and
opportunity to reach new market are the major tangible benefits of information technology.
Better support to employees can also be provided by having consideration of technology so that
work activities can be accomplished in desired time frame.
Stadtler, (2015) has also stated that there are number of issues that can be faced by
management of Tesco PLC while having an implemention of technological tools. It has been
noticed that the work process of UK retail sector changes in diverse manner in rapid form. It
means it is one of critical factor for management to have high level of investment on
technological tools. Financial issue can also be faced by the organisation that can also be
considered as barrier which may affect overall performance. It means it is necessary for
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management to focus on additional sources that can assist in gathering financial resource so that
issue can be overcome. Phillips, Gorantla and Phillips, (2016) has asserted that the security
breach is also one of critical issue that is faced by management of Tesco PLC. It might be
possible in few situations that significant information of business firm can be leaked due to
hacking and online security. It is necessary for management of Tesco PLC to take few decisions
in respect to issue. Legal values may also affect the overall working of organisation while using
internet and technological tools. It is significant for business firm to make sure that the
application of tool is according to health and safety aspect. Moreover, ethical values are also
properly maintained so that goals and objectives can be accomplished effectively. Reis, Esquivel
and Singh, (2013)has stated that the retail enterprise can overcome such kinds of issues through
increasing physical security. Passwords and other key meaures need to be implement by
management in order to make sure about security aspects. System upgradation is also significant
aspect that need to be consider effectively from the management of Tesco PLC. If applied
software are not tracked in appropriate manner then long term issues can be occurred. It means
management need to ensure about it in desired manner.
CONCLUSION
Summing up the entire report, it can be concluded that, business information system is
very important method to ensure long term success of firm. It further enable the use of
information and communication techniques to upgrade the processes. The business information
system also help Tesco in getting competitive benefit in market. Both outside and internal
sources can be used for the development of new software. With the help of 6 Cs framework the
advantages provided by new information system can be detailed out by focusing on factors like,
cost reduction, capability, communication, customer service, control and competitive advantage.
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REFERENCES
Books and Journals
Cegielski, C.G., Splettstoesser-Hogeterp, I. and Sanchez-Rodriguez, C., 2013. Introduction to
information systems: Supporting and transforming business. John Wiley & Sons.
Hu, G., Lin, Y., Shi, Y. and Guo, L., 2015. Understanding business ecosystem using a 6C
framework in Internet-of-Things-based sectors.International Journal of Production
Economics. 159. pp.41-55.
Reis, B., Esquivel, A. and Singh, H., 2013. Developing software to “track and catch” missed
follow-up of abnormal test results in a complex sociotechnical environment. Applied
clinical informatics. 4(3). pp.359-375.
Beynon-Davies, P., 2013. Business information systems. Palgrave Macmillan.
Christopher, M., 2016. Logistics & supply chain management. Pearson Higher Ed.
Davenport, T.H., 2013. Process innovation: reengineering work through information technology.
Harvard Business Press.
Dekker, R., Inderfurth, K. and van Wassenhove, L.N. eds., 2013. Reverse logistics: quantitative
models for closed-loop supply chains. Springer Science & Business Media.
Li, X., Hsieh, J.P.A. and Rai, A., 2013. Motivational differences across post-acceptance
information system usage behaviors: An investigation in the business intelligence
systems context. Information systems research. 24(3). pp.659-682.
Mörtlbauer, S., Sedelmaier, Y. and Schroll-Decker, I., 2014. Developing Software Engineering
Education as a Didactical Discipline in its own right. In 1st European Conference
Software Engineering Education (ECSEE), Aachen: Shaker (pp. 1-15).
Österle, H., 2013. Business in the information age: heading for new processes. Springer Science
& Business Media.
Phillips, W., Gorantla, A. and Phillips, V., 2016. Developing Software in the Academic
Environment. In Information Technology: New Generations. (pp. 1259-1266).
Springer International Publishing.
Power, D.J., Sharda, R. and Burstein, F., 2015. Decision support systems. John Wiley & Sons,
Ltd.
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Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and
advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Tayur, S., Ganeshan, R. and Magazine, M. eds., 2012. Quantitative models for supply chain
management . Springer Science & Business Media.
Wisner, J.D., Tan, K.C. and Leong, G.K., 2014. Principles of supply chain management: a
balanced approach. Cengage Learning.
Yeh, C.H., Lee, G.G. and Pai, J.C., 2012. How information system capability affects e-business
information technology strategy implementation: An empirical study in
Taiwan. Business Process Management Journal. 18(2). pp.197-218.
Online
About us. 2016. [Online]. Available through: <https://www.tescoplc.com/about-us/> [Accessed
on 25th August, 2016].
Business information system. 2016. [Online]. Available through:
<https://www.britannica.com/topic/information-system/Acquiring-information-systems-
and-services> [Accessed on 25th August, 2016].
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